http://www.marketwatch.com/story/women-are-better-retirement-planners-2012-12-29
The author of the article was quick to point out that women are more risk adverse than men, making it sound like that’s a disadvantage. In fact, being “risk adverse” is a great thing with a twist. I like to think that we all should be more loss adverse because to trade often thinking you are going to do better than the market averages is a losers game. Man are vulnerable to the betting and losing game.
In a study quoted by Paul Merriman’s podcast, the results were mixed. Men took more risks and women took less risk and stayed with their investments longer. Over the long term, women got higher performance because they had less trading expenses and used low cost funds. Men got hammered by trading costs and expensive managers because of their excessive trading. Women are not smarter than men, they stayed with the same investments longer than men.
We think beginning investors can learn from women’s perspective of long term thinking, less trading and the personal knowledge that they are not smarter than the market.
The evidence is mounting!
Additional articles about women’s financial decisions:
- http://www.northbaybusinessjournal.com/66949/womens-strengths-are-good-for-investing/
- http://propertyupdate.com.au/5-reasons-women-can-be-better-property-investors-than-men/
- http://www.cbsnews.com/8301-505144_162-57566679/debt-kills-love-like-a-criminal-record/